Yahoo Finance Take the Zacks Approach to Beat the Market: Virtu, Coinbase, General Mills in Focus
Last week, two of the three most widely followed indexes closed out a third consecutive losing week, while one closed virtually unchanged. The S&P 500 and the Nasdaq Composite declined 3.1% and 5.5%, respectively, while the Dow Jones Industrial Average climbed less than 0.1%.
Closing out a five-month rally that started in November, stocks have recently struggled in apprehension of delay in rate cuts by the Fed. A recent string of hot inflation data, robust jobs data and geopolitical tensions in the Middle East meant that the central bank is not yet ready to commit to a timeline for cutting rates. During the week, Federal Reserve Chair Jerome Powell refrained from offering guidance on interest rate cuts, suggesting a preference for maintaining current policies for a longer period.
Market participants continue to keep a keen eye on the quarterly earnings numbers that are pouring in to get a better hang of the situation while waiting for the Fed to make a decisive policy move.
Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.
As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.
Here are some of our key achievements:
GeneDx and Coinbase Surge Following Zacks Rank Upgrade
Shares of GeneDx Holdings Corp. WGS have gained 38.7% (versus the S&P 500’s 0.1% increase) since it was upgraded to a Zacks Rank #2 (Buy) on February 22.
Another stock, Coinbase Global, Inc. COIN, was upgraded to a Zacks Rank #1 (Strong Buy) on February 21 and has returned 21.8% (versus the S&P 500’s 0.3% increase) since then.
Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
A hypothetical portfolio of Zacks Rank #1 (Strong Buy) stocks returned +20.63% in 2023 vs. +24.83% for the S&P 500 index and +15% for the equal-weight S&P 500 index. The portfolio of Zacks Rank #1 stocks is an equal-weight portfolio, while the S&P 500 index is a market-cap-weighted index that has been notably distorted by the concentrated performance of mega-cap stocks in 2023.
We are not trying to cherry-pick here. But since this Zacks Model portfolio, consisting of Zacks Rank #1 stocks, is an equal-weight portfolio, the equal-weight S&P 500 index is the appropriate benchmark for comparison. Looked at this way, this portfolio has handily outperformed the index.
The Zacks Model Portfolio - consisting of Zacks Rank #1 stocks – has outperformed the S&P index by more than 13 percentage points since 1988 (Through January 1st, 2024, the Zacks # 1 Rank stocks generated an annualized return of +24.18% since 1988 vs. +10.88% for the S&P 500 index).You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check GeneDx’s historical EPS and Sales here>>>
Check Coinbase’s historical EPS and Sales here>>>
Image Source: Zacks Investment Research
Zacks Recommendation Upgrades MediaAlpha and Criteo Higher
Shares of MediaAlpha, Inc. MAX and Criteo S.A. CRTO have advanced 30.8% (versus the S&P 500’s 0.8% fall) and 10.3% (versus the S&P 500’s 0.9% fall), since their Zacks Recommendation was upgraded to Outperform on February 13 and February 12, respectively.
While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.
The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.
To access our research reports with Zacks Recommendations for the 1100+ stocks we cover, click here>>>
Zacks Focus List Stocks Quanta Services, Virtu Financial Shoot Up
Shares of Quanta Services, Inc. PWR, which belongs to the Zacks Focus List, have gained 23.9% over the past 12 weeks. The stock was added to the Focus List on December 23, 2021. Another Focus-List holding, Virtu Financial, Inc. VIRT, which was added to the portfolio on July 31, 2023, has returned 22.2% over the past 12 weeks. The S&P 500 has advanced 1.6% over this period.
The 50-stock Zacks Focus List model portfolio returned +21.72% in 2023 (through November 30) vs. +20.79% for the S&P 500 index and +6.32% for the equal-weight S&P 500 index. In 2022, the portfolio produced -15.2% vs. the S&P 500 index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +11.07% through November 30, 2023. This compares to a +9.49% annualized return for the S&P 500 index in the same time period.
On a rolling one-, three- and five-year annualized basis, the Zacks Focus List returned +13.49%, +9.21%, and +14.05% vs. +13.82%, +9.74% and +12.51% for the S&P 500 index, respectively.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stocks Tractor Supply and Cencora Make Significant Gains
Tractor Supply Company TSCO, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 11.1% over the past 12 weeks. Cencora, Inc. COR has followed Tractor Supply with 9.9% returns.
The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks, returned +12.17% in 2023 vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.
With little to no turnover and annual rebalance periodicity, the ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.
The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.
Zacks ECDP Stocks Hormel Foods and General Mills Outshine Peers
Hormel Foods Corporation HRL, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 12.1% over the past 12 weeks. Another ECDP stock, General Mills, Inc. GIS, has climbed 9.2% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.
Check Hormel Foods’ dividend history here>>>
Check General Mills’ dividend history here>>>
With an extremely low Beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk.
The Zacks Earnings Certain Dividend Portfolio (ECDP) returned -0.9% in 2023 vs. +26.28% for the S&P 500 index) and +8.11% for the Dividend Aristocrats ETF (NOBL). The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
Zacks Top 10 Stocks — Freshpet Delivers Solid Returns
Freshpet, Inc. FRPT, from the Zacks Top 10 Stocks for 2024, has jumped 20.7% year to date compared with a 4.5% increase for the S&P 500 Index.
The Top 10 portfolio returned +25.15% in 2023 vs. +26.28% for the S&P 500 index. Since 2012, the Top 10 portfolio has produced a cumulative return of +1060.9% through the end of 2023 vs. +360.1% for the S&P 500 index.
On a rolling one-, three- and five-year annualized basis, the Zacks Top 10 portfolio returned +25.15%, +14.13%, and +29.3% vs. +26.28%, +10.23% and +15.61% for the S&P 500 index, respectively.
Since 2012, the Zacks Top 10 portfolio has returned an annualized return of +22.67% through the end of 2023 vs. +13.56% for the S&P 500 index.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Quanta Services, Inc. (PWR) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
Tractor Supply Company (TSCO) : Free Stock Analysis Report
Hormel Foods Corporation (HRL) : Free Stock Analysis Report
Freshpet, Inc. (FRPT) : Free Stock Analysis Report
Cencora, Inc. (COR) : Free Stock Analysis Report
Criteo S.A. (CRTO) : Free Stock Analysis Report
Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report
MediaAlpha, Inc. (MAX) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
GeneDx Holdings Corp. (WGS) : Free Stock Analysis Report
